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20Oct2015 Pre-Market Commentary: Futures Are Fractionally Lower, Earning Reports Are Going To Drive Market Today

Written by Gary

U.S. stock future indexes are fractionally off yesterday's closing highs and earnings reports will likely be a big driver for stocks today. WTI oil is steady in the low46's and the U.S. dollar has moved up from its low point. Markets are expected to open fractionally lower.

Here is the current market situation from CNN Money

European markets are lower today with shares in France off the most. The CAC 40 is down 0.82% while Germany's DAX is off 0.19% and London's FTSE 100 is lower by 0.16%.

What Is Moving the Markets

Here are the headlines moving the markets.

Verizon revenue rises as promotions help attract postpaid users

(Reuters) - Verizon Communication Inc, the largest U.S. wireless service provider, reported a 5 percent rise in quarterly revenue as heavy promotions helped attract postpaid subscribers.

Oil steadies but outlook uncertain

LONDON (Reuters) - Oil prices steadied on Tuesday after a week of falls, but the outlook was uncertain with the head of the world's biggest independent oil trader saying the market would struggle to recover much ground over the next year.

United Tech profit falls on currency swings; plans $12 billion share buyback

(Reuters) - United Technologies Corp on Tuesday posted a decline in quarterly profit, hurt by foreign currency swings, and announced plans to buy back $12 billion worth of its shares.

Lockheed beats estimates on higher sales of F-35 jets

(Reuters) - Lockheed Martin Corp , Pentagon's No. 1 weapons supplier, reported better-than-expected quarterly sales, helped by higher demand for its F-35 fighter jets, and said it expects full-year revenue at the higher end of its forecast.

Yum Brands plans to separate China business

(Reuters) - Yum Brands Inc said it intended to separate its China business into a publicly traded company, bowing to pressure from an activist shareholder.

Bank of N.Y. Mellon profit off 23 percent, but tops estimates

BOSTON (Reuters) - Bank of New York Mellon Corp on Tuesday reported that third-quarter profit fell 23 percent from the year-ago period that included one-time gains but topped estimates, and said noninterest expenses fell as it cut staff costs.

Harley-Davidson third-quarter profit falls, stock plummets

(Reuters) - Harley-Davidson Inc. on Tuesday posted a lower quarterly net profit as global new motorcycles sales fell more than 1 percent.

Stock futures lower as commodities slide

(Reuters) - U.S. stock index futures were lower on Tuesday as prices of commodities fell on rekindled worries about demand from China.

Solid ECB lending data buoys euro, saps shares

LONDON (Reuters) - European shares fell for the first time in four days on Tuesday and the euro kicked away from a 10-day low as solid euro zone bank lending data cooled expectations of another jolt of European Central Bank stimulus this week.

Peak Debt, Peak Doubt, & Peak Double-Down

Via Scotiabank's Guy Haselmann,

Time to Hike Rates
It makes little sense to me why the market is only pricing a 6% probability of a rate hike at the October meeting, 30% for December, and only a near 50/50 probability all the way out to March 2016. The statutory mandates of the Fed as stated in the Federal Reserve Act are "maximum employment, stable prices, and moderate long-term interest rates". All three have been fully realized.

The unemployment rate is 5.1% (full-employment). Core CPI has been stable for years and printed 1.9% yesterday; remarkably close to the Fed's self-imposed target of 2%. For a few years, Treasury rates have been stable at near-historical low levels. In addition, the 4-week moving average of Unemployment Claims fell to its lowest level since 1973. The most recent employment report was a bit weaker than expected, but it fell within a standard margin of error. Yet, the Fed continues to remain at the emergency rate of 0.0%.

At the September meeting, the FOMC talked up the economy, but refrained again from hiking rates, citing "international developments". By making this decision, the Fed has to be careful it does not also provide an 'emerging markets put'.

As the October meeting approaches, international developments have settled down. Emerging market stocks indexes and currencies have bounced since the September FOMC meeting. Chinese markets in particular have calmed down and have traded higher. The US stock market is higher. The trade-weighted dollar is lower. Credit spreads are tighter. The arguments for a hike at the October or December meeting should have increased not decreased.

The recalibration in rate hike probabilities could be the result of the "data ...

Gold On Verge Of Posting First Positive Year Since 2012

Gold On Verge Of Posting First Positive Year Since 2012

Gold is looking likely to finish the year positive for the first time since 2012, according to Frank Holmes writing in Forbes today. Holmes points to the weaker US dollar, the probability of near-zero interest rates for the remainder of the year and a seasonal increase in demand as underpinning the positive momentum.

“…the yellow metal broke above its 200-day moving average and is close to erasing its 2015 losses. This could be the price reversal many gold bulls have been expectingâ€.

Holmes highlights the so-called US dollar “death-cross†which occurs when the 50-day moving average crosses below the 200-day moving average, an indicator that is “widely recognized as the start of a bearish trend†and not seen since September 2013.

This may be indicative of a downward trend for the dollar that would be good news for gold, allowing it “the breathing room it needs to reach the important $1,200 resistance levelâ€.

Read more on the blog

Today’s Gold Prices: USD 1173.70 , EUR 1032.87 and GBP 747.86 per oun ...

Tech Startups Feel an IPO Chill

Sky-high valuations are starting to backfire on some Silicon Valley companies that are trying to raise more money or go public.

For Hedge Funds, a Can't-Miss Trade Goes Bust

“Hot money†gets burned after hedge-fund and private-equity managers are caught in crude oil’s fall.

Global Stocks Pressured by Mining, Energy Shares

Shares of mining and energy companies weighed on global stock markets Tuesday amid ongoing concerns about China’s slowing economy.

Condo And Co-Op Lending In An Upswing. Originations Up 31 Percent With California Markets Leading The Growth.

from CoreLogic

Condominium and housing cooperative (co-op) mortgage originations nationwide rose 31 percent to $39 billion in the second quarter of 2015 compared with $29.7 billion in the same quarter of the previous year (Figure 1). The growth was driven mainly by a 65-percent increase in the dollar volume of refinance loans. However, purchase money and closed end/home equity line of credit (HELOC) loans also showed 13 percent and 29 percent increases, respectively1. Purchase money originations of $19.6 billion were at the highest levels since the end of 2007 when it was at $21.3 billion.

Geopolitics And The Pitfalls Of Provocation


-- this post authored by Rodger Baker

Words matter in seeking to explain the actions of states and individuals and to divine the response that would best protect the national (or business or personal) interest. Complexities abound, and assertions based on minimal facts often must be made.

Market Snapshot: U.S. stock futures slip in face of earnings deluge

Wall Street is set for a downbeat open, as investors prepare for the peak of earnings season and await the latest housing data that could feed into the Federal Reserve’s interest-rate assessment.

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